They were hyped as the ultimate luxury flats. But has anyone moved in to
London's exclusive One Hyde Park yet? Neil Tweedie reports

The best thing that can be said about One Hyde Park is that it could have been much worse. This dull-fronted development of four blocks of galactically-priced flats is easily ignored as one tries to negotiate the hellish junction that connects Knightsbridge with the Brompton Road.

Yes, there is a McLaren showroom at the base of one block with a Formula One car strapped to the wall, and a Rolex shop at the base of another, and some token bits of greenery protected from the exhaust fumes by glass boxes - a dystopian feature, that - but you can seethe your way through near-stationary traffic without paying too much attention to what the Royal Mail still insists is 100 Knightsbridge. Which is probably how the inmates like it.

The hyper-rich people One Hyde Park was built to accommodate prefer not to be noticed in the main, certainly by people who may begrudge them their money. But if trouble does come calling, and manages to evade the sharp-suited muscle on the doors, there is always the panic room. One Hyde Park has it all: bomb-proof windows, rotating paintings-cum-television screens and cameras that allow you to check for dandruff on your back while grooming yourself in the mirror. Then there is the gourmet food delivery service provided by the neighbouring Mandarin Oriental hotel via an underground tunnel. Such features come at a cost, of course.

The development contains Britain’s most expensive flat, a £136 million, three-storey apartment recently acquired by the Ukrainian oligarch Rinat Akhmetov. Mr Akhmetov, whose interests range from steel to hotels, is worth about £10 billion, making him the richest man in his country. So the £60 million he intends to spend on decorating his new pad will make only the smallest of dents in his bank balance. He and his wife Liliya, who is understood to have a fondness for London, are in good company, counting Russian oligarchs and Arab princes among their neighbours.

But are there really any proper residents in this temple to conspicuous consumption? Or is One Hyde Park merely a “ghost block”, a repository for wealth, a safe place to park some money in an uncertain world?

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Costing £1 billion, One Hyde Park is the creation of brothers Christian and Nick Candy, a double act who evoke admiration and disdain in equal measure. Fans of the thirty-something developers credit them with creating the current boom in super-luxury homes in London, while detractors accuse them of sponsoring invasive, tasteless developments. It can be safely assumed that the Prince of Wales is in the latter camp. He torpedoed the Candys’ plan to redevelop Chelsea Barracks into flats, persuading his fellow royals in Qatar to withdraw funding. Like the abortive Chelsea project, and the Shard skyscraper on the south bank of the Thames, One Hyde Park has been built with Qatari money.

“The Candys invented hyper-luxury flats at £4,000 a square foot and kick-started the luxury flat boom,” says Peter Bill, who writes on the London property market. “One Hyde Park has set a new benchmark for the whole of the west London market.”

The Candys initially appeared to have over-stretched themselves with One Hyde Park. But their confidence in the hyper-luxury model appears to have paid off. Of the 86 or so flats in the development, more than 50 have been sold for £973 million. When outstanding contracts are completed that figure will rise to £1.25 billion. The Candys say the development company they run with the prime minister of Qatar now owns “under 25” flats. The developer received planning permission for 86 apartments but the final number is likely to be closer to 80 as some purchasers are choosing to merge apartments together. The figures suggest that the Candys and their Qatari backer have now covered their costs, and are about to start making serious money.

“We sold over £100 million of apartments last week,” says Jessica Patrick, spokesman for the Candys, “and we anticipate achieving another £225 million of apartment sales this week alone.” But has anyone actually living there full-time?

“There are over 20 nationalities represented at One Hyde Park and it is likely to be one of many homes for the residents living there,” she says. “These individuals will be travelling from country to country for business, spending time at their ski chalets in the winter, visiting their palaces in the Middle East, and their yachts in Cannes or Sardinia in the summer.”

Liam Bailey, of estate agents Knight Frank, says such people do not buy high-end properties purely as investments.

“They want location - Knightsbridge, Mayfair, Belgravia - the area with Hyde Park at its centre, but they prefer modern developments or very-well-refurbished older properties. They are Russians, Arabs, Indians and Europeans - and now some Chinese - who spend some time in London each year. They have networks here - family, friends, business contacts - and they are often drawn by education - their children attend British schools and universities. The owner may not be in One Hyde Park all the time but chances are that his or her children or extended family may be staying there.”

Despite the rise of Asian cities, London still maintains its hold on the super-wealthy. Knight Frank publishes a global cities index that places the capital second only to New York in importance. That position is expected to remain unchanged in 10 years’ time, despite the rise of rivals like Shanghai.

“The UK is perceived as a very safe place to be, both to invest in property, particularly the golden triangle of Knightsbridge, Belgravia and Mayfair, and in terms of security,” says Valerie Brecher, senior partner in a law firm that specialises in top-of-the-market conveyancing. “One Hyde Park won’t be a ghost block. People will live there, but I doubt all the time. These people are international, they travel. Some of the smaller units may have been bought with a view to letting but that is not the primary intention.”

The Candys, she says, have played a blinder with branding. “This has been branded as the best address in the world. The branding is very clever. It is also perceived to be a very safe building - a lot of the residents come from countries where they have to walk around with body guards.”

Ms Brecher has expanded her firm’s residential property arm to deal with the luxury boom, which she says began in earnest at the end of 2009. “The prices for these properties is going through the roof. There is a huge demand and the problem is shortage of the product. Quite unbelievable.”

Not everyone is a fan of London’s status as a haven for the super rich, some of them people with murky histories. Richard Murphy runs the website Tax Research, which seeks to shed light on tax avoidance and evasion. Many luxury property purchases, he says, are exercises in concealment. Buyers use offshore companies, usually owned by so-called discretionary trusts that mask the identity of the real owner.

The use of offshore structures allows wealthy non-domiciles to avoid paying millions in stamp duty when their London homes are sold because only shares are transferred. Such arrangements mean their wealth never technically touches British shores, protecting it from other forms of taxation such as capital gains tax.

Even council tax rates are on the reasonable side for those living at One Hyde Park. Mr Akhmetov will pay just £755.60 in council tax to Westminster Council for the year 2011-12, plus £619.64 to the Greater London Authority. But the total annual charge of £1,375 is still less than the national average of £1,398 for a Band D property.

“This is conspicuous consumption gone mad," says Mr Murphy. “Britain is uniquely generous to the ultra-rich of the world, the justification being that these people bring money, entrepreneurial expertise and jobs into the UK. There is absolutely no evidence to support this assertion.

“It makes the UK a tax haven, and it makes the UK a two-tier society based on accident of birth and nationality, which is discriminatory. These people are blatantly rubbing their tax-free status in the noses of British taxpayers, which could lead some people to say, 'If they can get away with it, what can I get away with?’ This is highly counter-productive for the UK.”

Would he like to live in One Hyde Park? “No. I look out of my window at the beautiful Norfolk countryside. Why on earth would I want to live there?”